Durable Goods Spending Accelerates Month-over-Month for Fourth Month

As the year-over-year change in the 10-year Treasury rate has dropped, consumer spending on durable goods has grown faster.

In August, the month-over-month rate of growth for durable goods spending was 5.6%, which was the fastest rate of growth since August 2018. Additionally, it was the fifth month in a row with growth faster than 4.0% and the fourth straight month of accelerating growth. The accelerating rate of growth was likely the result of the falling change in the real 10-year Treasury rate. Because the 10-year rate itself has dropped so low, durable goods spending is making up its largest share of all consumer spending ever. 

However, the annual rate of growth decelerated to 4.2%. This was the slowest annual rate of growth since September 2010, but with the recent month-over-month growth in durable goods spending and the declining year-over-year change in the 10-year Treasury rate , there could be some modest acceleration in the annual rate of growth heading into the fourth quarter.

Below are key spending categories that lead the most important manufacturing new orders and production indices.

Accelerating Growth: electronics, other non-durable goods, pleasure boats

Decelerating Growth: air transportation services, clothing/footwear, durable goods, food/beverage, medical care, motor vehicles/parts, total consumer

Accelerating Contraction: 

Decelerating Contraction: appliances

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